New York’s popularity with visitors has not diminished in recent years, and even led to a swathe of newly constructed hotels. However, despite the increase in capacity, the city’s high occupancy rates are seeing little decline. According to real estate investment management firm Jones Lang LaSalle, New York was last year “the most active hotel investment market” in the world.
New York City, according to data by analysts Smith Travel Research (STR), has over 11,000 rooms currently being constructed. Marriott International recently opened its 68-floor hotel near Broadway, which is reportedly the tallest hotel in the US. However, despite these new offerings, the city has such a high demand that they will quickly be filled up, says, analyst John Fox, a senior vice president at PKF Consulting.
“It’s almost a bottomless pit, there is so much unsatisfied demand. If it’s sold out in Manhattan, there’s somebody staying out in Newark,” he told Business Travel News.
According to PKF president Mark Woodworth, visitors to New York are particularly looking for lower-cost developments, and are willing to forgo the typical luxuries for a simple room. This, he says, is where there is the greatest demand.
“Fundamentally, we need more rooms in this market, and people like those products – they like the Hamptons Inns and the Holiday Inn Expresses. They say, ‘Give me a room, and I don’t need a lot of space, as I’m in New York to do something outside or somewhere else.”
Occupancy rates have been on the rise throughout the country in the early part of this year. Despite cold weather, hotels in the US have seen an influx of visitors, says STR. While the country as a whole enjoyed a sharp rise in visitors during February – an average increase of 3.3 percent to 60.3 percent occupancy – regions towards the east enjoyed the biggest rise.
In particular the city of St Louis, in both Missouri and Illinois, saw a double digit occupancy increase of 10.1 percent during February. The rest of the country enjoyed healthy rises, according to STR, and this is perhaps reflected in prices being slashed.
“February results were healthy. RevPAR (revenue per available room) increased 7.3 percent, driven primarily by a 3.9 percent increase in ADR (average daily rate). Last year in February ADR increased 4.5 percent.
“This year growth was lower, but nonetheless stronger than in January, up 3.2 percent. Occupancy for the month was just over 60 percent, so hotels are reporting stronger occupancies again, and this goes hand in hand with some pricing power.”
